ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Global Fertiliser Crisis and Its Impact on the Indian Fertiliser Sector

The impact of the recent hike in the international prices of fertiliser products and raw materials on the fertiliser sector in India is analysed. The effect on the domestic availability of fertilisers, their domestic production, and subsidy burden are examined. The results revealed that the agriculture sector faced a severe shortage of fertiliser products. Though India tried to increase domestic production by hiking the targeted monthly production, it failed to do so as it depends more on imported feedstocks and raw materials. The government was bearing the burden of the price hike by providing subsidies. For the first time in history, the revised estimate of fertiliser subsidy continuously increased over `1 lakh crore from 2020–21 to 2022–23.

The author is grateful to the comment received from the reviewer.

The significant role of chemical fertilisers in increasing the production and productivity of agriculture in developing countries, is well established in the literature. Scholars have argued that fertilisers were as essential an input in the green revolution as that of high variety seeds (Tomich et al 1995). Fertilisers had contributed as much as 50% of the growth in the yield in Asian continent (Hopper 1993; FAO 1998). Others have found a high correlation between fertiliser use and agriculture production (Morris et al 2007). One-third of the worldwide cereal production results from the use of fertiliser and related factors of production (Bumb 1995).

The international fertiliser industry is a highly concentrated market. A small number of countries control most of the production capacity for nitrogen, phosphate, and potash (Hernandez et al 2011, 2013). Any change in the actions of major players, in the international market, leads to excess supply or demand and the consequent changes in the price. Because of this nature of the industry, fertiliser prices in most developing countries are determined directly by the government at both producer and farmer levels, considering the importance of fertilisers in agriculture and ensuring food security (Kohli 1986).

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Updated On : 6th Jul, 2023
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